bank statement

Examples of bank statement in the following topics:

• Reconciling Cash Accounts and Bank Statements

  • A bank statement only reflects a specific period of time, such as one month .
  • However, it takes the banks time to prepare the statement and send it out.
  • As a result, a bank statement will generally not reflect the amounts that a company has on its own books.
  • A bank reconciliation is a process that explains the difference between the bank statement on the amount shown in the organization's own financial records.
  • This is why reconciling the bank statement is necessary.

• Outputs of Accounting

  • Statements typically include four basic financial statements accompanied by a management discussion and analysis.
  • These statements are as follows:
  • The notes typically provide detail for items on the balance sheet, income statement, and cash flow statement.
  • Notes to financial statements are considered an integral part of the financial statements.
  • Financial institutions (banks and other lending companies) use statements to decide whether to grant a company fresh working capital or extend debt securities (such as a long-term bank loan or debentures).

• Using a Bank for Control

  • Using a bank is one of the best internal controls on a business's cash.
  • The bank generally also sends the business a monthly statement that summarizes the activity associated with the account.
  • This statement will list all deposits and withdrawals.
  • If there are any differences between the business records and the bank's, the company can use the documentation enclosed with the statement to determine where the discrepancy is and contact the peopled involved with the questionable transactions.
  • Describe why a bank is one of the best internal controls a business can use

• Preparing Financial Statements

  • Financial statements for Highland Yoga for each period would appear as follows:
  • Therefore, the people who use the statements must be confident in its accuracy.
  • These statements are:
  • The findings can state anything from the statements are accurate to statements are misleading.
  • Explain the necessary steps to take before preparing the financial statements and the purpose of the statements

• Managing to Prevent Fraud

  • To meet financial goals for the company managers may be tempted to "cook the books. " To help prevent management from adjusting financial statements, an independent auditor should examine financial statements on an annual basis.
  • Failure to implement adequate internal controls can result in financial statement fraud (purposely misstated financial statements) or embezzlement (theft).
  • Typical tools used in forensic accounting are bank records, personal financial statements, interviews, and credit reports.
  • Financial statement fraud involves the intentional publishing of false information in any portion of a financial statement.
  • To meet financial goals for the company managers may be tempted to "cook the books. " To help prevent management from adjusting financial statements, an independent auditor should examine financial statements on an annual basis.

• An Expanded Equation

  • Financial statements for Highland Yoga for each period would appear as follows:
  • Therefore, the people who use the statements must be confident in its accuracy.
  • These statements are:
  • The Income Statement: A summary of the business's income, expenses, and profits
  • The findings can state anything from the statements are accurate to statements are misleading.

• Uses of Financial Reports

  • Financial statements may be used by different stakeholders for a multitude of purposes
  • These statements also are used as part of management's annual report to the stockholders.
  • Financial institutions (banks and other lending companies) use them to decide whether to grant a company working capital or extend debt securities (such as long-term bank loans or debentures) to finance expansion and other significant expenditures.
  • The audit opinion on the financial statements is usually included in the annual report.
  • Corporate officers (the chief executive officer (CEO) and chief financial officer (CFO)) are personally liable for attesting that financial statements "do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report. " Making or certifying misleading financial statements exposes the people involved to civil and criminal liability.

• Types of Cash

  • Types of cash include currency, funds in bank accounts, and non-risky financial instruments that are readily convertible to cash.
  • A certificate of deposit, or CD, is a financial product offered by banks to their customers.
  • As a result, demand CDs generally have lower interest rates than CDs that allow the bank to hold onto the money for an agreed upon term.
  • Generally only demand CDs or CDs that will mature within three months of when the financial statements are prepared are cash equivalents.
  • However, these types of instruments are only included in cash if they mature within three months from when the the financial statements are prepared and there is a minimal risk of these investments losing their value.

• Reporting Cash

  • Cash is reported on the balance sheet at its current monetary, or fair, value to accurately reflect the entity's value on the statement. .
  • For example, it might have one account for petty cash, another for how much cash it has in one bank account, and another detailing how much money it has invested in a CD that will mature in less than three months.
  • A balance sheet is different from other financial statements because it describes a specific moment in time while the other statements describe activity over a period of time.
  • As a result, the cash value on the balance sheet will only be accurate as of the end of the business on the date listed on the statement.
  • When you receive a balance sheet, the current balance of cash might be very different from what is reported on the statement.

• Preparation of the Income Statement

  • Finance costs are costs of borrowing from various creditors (e.g., interest expenses, bank charges).
  • Certain items must be disclosed separately in the notes (or the statement of comprehensive income), if material, including:
  • Because of its importance, earnings per share (EPS) are required to be disclosed on the face of the income statement.
  • A company that reports any of the irregular items must also report EPS for these items either in the statement or in the notes.
  • Explain the difference between the operating and non-operating section of the income statement